The Real Chicago Boys: Understanding an Economic Revolution

By Nazihah Adil, Institutional Giving Assistant

Chicago Boys, the second play in our New Stages Amplified series, explores the economic policies that shaped the 1973 Chilean coup d’état. Named after a group of young Chilean economists who trained largely under the renowned economist Milton Friedman at the University of Chicago or the affiliate Catholic University of Chile, Chicago Boys offers a glimpse into the revolutionary ideas that went on to form the foundations of Chilean economic policy under the regime of Augusto Pinochet.

Photo of Derek Gaspar and Brad Armacost by Michael Brosilow



This set of ideas was heavily influenced by the Chicago school of economics, whose theories rejected Keynesianism, the predominant economic model during the mid-twentieth-century, in favor of monetarism and rational expectations. Simply put, the Keynesian economic model, named after John Maynard Keynes, advocated a mixed economy, one with a predominant private sector—run by private individuals and groups and free from state control—but with a marked government and public sector presence. At the heart of the Chicago School, on the other hand, was its unrelenting advocacy of the free market and little room for government intervention.

In Chicago Boys, the tension between the free market theories of the Chicago School and the socialist views of the supporters of the freely elected Salvador Allende is at its peak. In a covert attempt to counter the spread of developmentalism that threatened the economic stability of the United States, the State Department partnered with the Ford Foundation to establish the “Chile Project,” a project designed to influence Chilean economic thinking. Graduates of this program became known as the Chicago Boys. The ideas promoted by the Chicago Boys went largely unnoticed until the 1973 coup d’état and the fall of Allende. Under the Pinochet regime, the economic policies originally drafted by the Chicago Boys in a confidential report came to the fore. These reforms called for economic liberalization, privatization, and stabilization of inflation. Economic liberalization promoted laissez-faire economics, free from government intervention, while privatization shifted control of publicly owned enterprises into the hands of private individuals and groups.

While the economic policies that grew out of the Pinochet regime remain controversial, the impact of the Chicago Boys and their namesake is unprecedented. Chile is now a regional economic leader, and based on a series of 10 economic measures, its economy was ranked the 10th freest in the world according to the 2010 Index of Economic Freedom.